HG Livery Supply has a beginning accounts payable balance of $68,800 and an ending accounts payable balance of $72,700. Sales for the period were $942,800 and costs of goods sold were $534,200. What is the payables turnover rate?

Question

Quizplus · Accepted Answer

The payables turnover rate is calculated by dividing the cost of goods sold by the average accounts payable. Average accounts payable is ($68,800 + $72,700) / 2 = $70,750. The payables turnover rate is $534,200 / $70,750 = 7.55 times.

HG Livery Supply Has a Beginning Accounts Payable Balance of $68,800